Behind Neon’s Slow Burn Legal Battle That May Lay Bare Hollywood Accounting Practices

Director Alan Elliott at the L.A. premiere of 'Amazing Grace' in 2019. Rachel Murray/Getty Images for Neon Logo text

In December 2018, director Alan Elliott was over the moon. Amazing Grace, his long-shelved Aretha Franklin concert film that had faced years of legal setbacks in a battle with the singer’s estate had just set a box office record at New York’s Film Forum, where it opened to qualify for the Academy Awards. In four hours, it had sold out two weeks’ worth of screenings — the biggest presale in the theater’s 48-year history.

By all appearances, the title had all the makings of a hit doc, the kind of movie that garners serious buzz by word-of-mouth. It wasn’t your typical West Village cinephile flocking to the film. Families and older folks showed up to watch the live recording of the most successful gospel album in history.

Across the coast, Spike Lee had hosted an Academy-member screening as part of the campaign to get the movie on the Oscar doc shortlist. Netflix made an offer. So did A24, MGM and Endeavor. But it was Neon that ultimately acquired the movie in a deal that included a $1.5 million advance.

Neon president Tom Quinn had seen Amazing Grace at its DOC NYC premiere, describing the viewing as a “spiritual experience in a theater” that “defies categorization on all levels.” The fledgling distributor had shown the wherewithal to turn around acquisitions into splashy releases in a short time. By Elliott’s thinking, he was Oscar-bound.

A still from Aretha Franklin doc Amazing Grace, which currently sits at 99% fresh on Rotten Tomatoes. Telluride Film Festival

But flash forward a year, and the movie didn’t garner much awards contention and got a limited theatrical run before ending up on Hulu. Elliott sued Neon in 2022, faulting it for a series of missteps that undermined the potential success of the movie and positioning expenses on the production so that he never breaks even. The long-running case provides a rare glimpse into a movie’s finances. Discrepancies in financial statements have been uncovered. So have millions of dollars in legal fees charged to the film for Neon to defend itself from Elliott’s lawsuit.

It would be a rare spectacle if the case goes to trial, with Quinn potentially testifying and the public airing of communications by other Neon executives. A jury would assess the distributor’s finances and accounting practices, including the kind of information that could give talent a leg up in negotiations, as chatter swirls of a Neon sale. It’s the kind of case that could embolden other creators to sue.

“I didn’t sign up to become some crazy martyr indie movie guy,” Elliott, who mortgaged his home three times to finance the movie, tells The Hollywood Reporter. “But I’m the only guy, for better or worse, who broke the first rule of Hollywood: don’t put your own money in. I did, so now it’s incredibly personal.”

Now, Neon is largely recognized as a unicorn in the indie film world, where it’s becoming harder to find buyers that will take risks betting on outside-the-mainstream titles as box office revenue shrinks. Along with A24, it’s become the go-to home of boundary-pushing filmmakers looking to court the Letterboxd Generation of under-35 moviegoers. But back in 2019, when the distributor was handling Amazing Grace’s rollout, Elliott claims that Neon didn’t have a standalone marketing or accounting arm as it grew from a fledgling distributor to the industry’s “It” indie outfit.

More than seven years after it premiered, Amazing Grace isn’t showing a profit. Depending on who you ask, you’ll get a different answer to the question of why. Indie movies typically don’t do big numbers at the box office, where the documentary made roughly $4.5 million. That goes double for a niche title like Amazing Grace. Indeed, many of Neon’s filmmakers do not see profits from their movies. Asked when expenses are typically made back on the company’s movies, Neon CFO Ryan Friscia said in a deposition, “I’d say on a lot of films, it never recoups,” according to a court filing.

Still, Elliott accused the company of fraud and breach of contract, alleging it failed to properly account for revenues and costs involving the movie. Accounting statements show that the company incurred $4.6 million in distribution expenses, all of which are labeled under industry-standard, catch-all categories like “creative advertising,” “marketing and promotion,” and “other miscellaneous.” And the more Neon charges to the movie, the more interest it earns from these expenditures and the $1.5 million advance it paid to Elliott that has yet to be recouped, which has netted the distributor at least $370,000. As of March 2025, Amazing Grace is nearly $2.9 million in the hole, according to an accounting statement read by THR, which reviewed hundreds of pages of court filings for this story.

“We’re extremely proud of the campaign we executed for Amazing Grace,” a Neon rep said when asked for comment by THR. “We strongly disagree with Alan Elliott’s claims, the vast majority of which have already been dismissed by the Court. Neon has acted in accordance with its contractual obligations and remains confident in its position.”

Tom Quinn, CEO of Neon. Getty

Elliott, the son of prolific composer Jack Elliott, cut his teeth in music. Warner Bros. Records signed him to a recording contract after graduating from Northwestern University in 1986, and, after a stint at Atlantic Records as a producer, he returned to the label as a creative liaison for the likes of Prince, Miles Davis and Paul Simon. In 1994, he and Ari Emanuel started Matter Inc., intending to make big bucks selling music online. “I said to Ari we are all going to be getting music and movies on the internet,” he says. “Ari couldn’t even turn on his cell phone.”

When that venture didn’t work out, Elliott returned to the recording business, turning down overtures from Emanuel, who was the best man at his wedding, to work as an agent. He composed and arranged scores for TV shows, including Here and Now, The Naked Truth and the Grammy Awards, for the next decade, playing a major role in trying to unionize composers and lyricists along the way (his signature on every email reads “power to the people.”)

Elliott had been eyeing Amazing Grace for decades. The movie is the product of a massive screw up by Sydney Pollack, who spent two days in a Watts church in 1972 filming Franklin when she recorded her album but forgot to use clapperboards, meaning that the footage couldn’t be synchronized with the sound. Enter Elliott, who had learned of the shoot in 1990 from Atlantic Records producer Jerry Wexler and never forgot. He bought the assets from Warner Bros. (Emanuel put in a good word). And with the help of digital detectives at a film lab, he successfully synced the footage, though there was another obstacle: Franklin, who sued multiple times to block its release for undisclosed reasons. The movie only got to theaters in 2018 after the singer died, with Sabrina Owens, the executor of the Franklin’s estate, clearing the way.

At the time Neon picked up the movie, it was outsourcing all marketing and accounting functions to Alamo Drafthouse, according to court filings. The two companies have close ties, with founder Tim League also cofounding Neon with Quinn.

“At the very beginning phase, it didn’t have a marketing team. It was a total startup,” said Neon CFO Christian Parkes, who noted in an industry podcast earlier this year that he worked at Alamo Drafthouse and Neon for the first nine months of the distributor’s existence. “And so Neon was using my team at Alamo Drafthouse” to “market the Neon movies.”

He added, “It was like, ‘Hey, can you place the media? Can you do the creative? Can you guys do this part of the business of releasing films?'”

And because Neon didn’t have a marketing arm, it brought in outside consultants, whose fees were billed as distribution expenses, according to Maurice Pessah, a lawyer for Elliott. One charged the production roughly $13,000 to book the movie for theaters in the East Coast and Midwest, a function the director says he was led to believe that the company could handle in-house.

Under the distribution deal, employee salaries can’t be charged to the movie. But the lawsuit alleges Neon double dipped. One example: Amazing Grace was billed over $16,000 in consulting fees for digital market services by a company owned by Andrew Brown, Neon’s president of digital distribution who was the company’s svp of digital strategy, marketing and distribution at the time of the charge in 2019, according to a review of court documents.

Neon disputes that Brown was a full-time employee when the charge was incurred, though a 2022 report when he was promoted to his current position says that he has held an executive title since 2017. “Andrew started as a consultant in 2017 and was hired in early 2020,” Friscia said in his deposition.

“That’s the kind of thing that would make you want to take a second look” at the accounting statements, says Rob Rosenberg, partner at legal advisory firm Moses Singer and former Showtime Networks executive vp and general counsel. “I can understand the distrust on Alan’s part.”

Some of the same issues flowed from Neon’s finance department, with the company largely outsourcing those duties to Alamo Drafthouse. There were no dedicated, full-time employees in that arm, which handles verifying and logging all distribution expenses for accounting statements, other than Neon former vice president of finance James Wehrfritz, until 2020, when Friscia was hired, per court documents. This was a source of contention between Quinn and Wehrfritz, who said in a deposition that he “thought it made sense to have more permanent resources.”

The two sides were at odds. Wehrfritz explained, “The issue was in terms of the appropriate level of employees that need to be hired into the accounting/finance function.”

The solution wasn’t much better, at least initially. Neon hired outside consultants, one of whom Wehrfritz said in a deposition had a “basic lack of understanding of how things worked” and wasn’t familiar with accounting practices “specific to the industry.” From January to April 2019, when the bulk of distribution expenses were charged to Amazing Grace, Wehrfritz was the sole internal employee at Neon responsible for accounting on 10 films (for comparison, Orchard Films had two employees handling accounting on five movies when Wehrfritz was at the company). Even two years later, when the distributor acquired Pig, he had no full-time employees under his supervision to handle logging expenses on a catalogue of over 40 films, according to the lawsuit.

Later, Neon discovered its own errors in Elliott’s accounting statements, one being a $30,000 expense that should have been catalogued under its moon landing doc Apollo 11 that was improperly charged to Amazing Grace. Another involved a miscategorization of hundreds of thousands of dollars, though the charge didn’t impact the final recoupment tally for the film. “It’s an embarrassing error,” Friscia said of the mistake in a deposition. “Like I would take it personally if I had done that.” To Elliott, these seemingly minuscule mistakes that were ultimately corrected encapsulate Neon’s deception. The director contends that if Neon could be wrong about a $30,000 charge, what else is it wrong about, even if it’s not outright lying?

Internal communications uncovered in discovery indicate that there were oversights as Neon built out its accounting department. “Our finance team has been revamping their internal process this year, and unfortunately, these months have slipped through the cracks,” wrote Sumyi Antonson, Neon evp of theatrical marketing and distribution, in an email in August 2019.

Part of Elliott’s falling out with Neon involves what the director believes was the impotency of its marketing campaign. Amazing Grace was praised by critics, with one particularly laudatory review from The New York Times‘ Wesley Morris.

But internally, Neon didn’t consider a serious Academy Awards push. Elliott had started self-distributing the film over objections from the distributor to wait. Neon bought it anyway. “We accepted that Alan had made a miscalculation and a mistake by qualifying the film in that year, and we told him that,” said Quinn in a deposition. “And we accepted that he disagreed with that advice, and we let him proceed.” Neon personnel, Quinn added, understood Amazing Grace “was not going to be an aggressive contender.”

Ultimately, Elliott took the lead marketing his movie, scheduling screenings and handling public relations without looping in Neon. To Quinn, the director overstepped. Tensions flared. In a heated back-and-forth in 2019, Quinn said he was called a “bitch” by Amazing Grace producer Tirrell Whittley. “Alan was making unreasonable requests,” Quinn recalled. “We conceded every time.”

Things only got worse after the movie finished its theatrical run just shy of $5 million, which would’ve triggered a $500,000 bonus for Elliott, he says. His team pressed Neon for financial information, a major point being how more than $2 million was spent marketing Amazing Grace. For some of these inquiries, the read-in-between-the-lines accusation was that Neon is fudging the numbers. Elliott insists his movie has been profitable for the company.

“We have recouped our advance, and we have recouped our expenses,” Quinn said in a deposition. “I believe we have made money on this film.” That assertion was later contested by Friscia, who said that Quinn was “mistaken.” Jeff Deutchman, Neon’s president of acquisitions, development and production, said Amazing Grace was “financially modestly successful for us.”

By 2021, Quinn was done engaging with Elliott on quarterly financial statements beyond what Neon was obligated to provide under the distribution agreement. He thought Neon had gone above and beyond in terms of transparency, including handing over information relating to its licensing fee from Hulu, though he declined providing invoices to back up expenses — a major point of contention for Elliott. Quinn said he was subject to a “never-ending amount of harassment” from the director, who “simply would not be happy with any amount of information or postmortem discussion that we provided.”

“I recall that we urged Alan to audit us,” Quinn stressed.

But when Elliott moved to initiate an audit, Neon responded by filing an arbitration claim against the production. It said it would drop the matter if the production banner for the movie agreed to release the distributor from any potential claims arising out of prior accounting statements. It also moved for profits from Elliott allegedly licensing clips of Amazing Grace without Neon’s consent, a matter that caused friction between the two sides, and for the director to cease bad-mouthing Neon to Criterion, which was engaged in talks to release the film.

Elliott balked. And on the day of trial, Neon said it wasn’t prepared to argue the case, which was later dismissed. But by that point, all the money the production scraped together to conduct the audit had been spent on legal fees, the director says.

Later, Neon billed costs from that arbitration to the production, plus millions of dollars for Quinn Emanuel, whose lead lawyer for the case charges $695 per hour, to defend the company from Elliott’s ongoing lawsuit. By last year, the total reached more than $2.5 million, which has accrued interest since then (legal fees haven’t been charged to the production, according to a source in Neon’s camp). It’s the biggest line item in the director’s participation statement. The move essentially ensures that neither side will see money from the movie for years, if at all.

In court, Neon was poised to win the lawsuit before it got to trial. The court’s posture, however, changed when it learned of Neon charging its legal fees to the production. “I don’t think anyone would have agreed to that in the distribution agreement,” said State Supreme Court Justice Nancy M. Bannon in a hearing in May 2025.

Elliott seeks at least $5 million. But for him, it’s not just about the money; It’s about getting what he considers is rightfully owed to him. He’s turned down settlement offers and is prepared to file another lawsuit.